John Boehner has condemned President Obama’s new plans to slash the budget deficit by $1.1trillion over the next ten years, calling the country ‘broke’ and saying the cuts don’t go far enough.

The House of Representatives Speaker warned: ‘Everything is on the table. We’re broke. Let’s be honest with ourselves.’

His damning assessment comes as White House budget director Jack Lew said the cuts will put the government on track to halve the budget deficit by the end of Obama's first term in office in 2012.

Clash: President Obama will announce $1.1trillion of cuts as he attempts to reduce the enormous budget deficit which is 10 per cent of GDP. But Speaker John Boehner warns it doesn't go far enough because the U.S. is 'broke'

He said: ‘We are reducing programmes that are important programmes that we care about, and we're doing what every family does when it sits around its kitchen table: we're making the choices about what do we need for the future.’

But angry Republicans, who control the House of Representatives, were quick to stress that the proposed spending cuts would not do enough to rein in the growing federal deficit and promised their own plan would go further.

Boehner fumed: ‘He's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much and taxing too much.’

The White House intends to get two-thirds of the $1.1trillion in savings from spending cuts and the rest from tax revenues, including closing several tax loopholes, sources close to the budget said.

President Obama delivers his State of the Union address, where he called on Democrats and Republicans to work together on reducing the deficit.

The proposals, due to be formally announced on Monday, are expected to spark fresh debate between Republicans, who reclaimed Congress at last year’s mid-terms fuelled by Tea Party activists calling for massive spending cuts, and Democrats who – until recently – had supported spending increases as a way to stimulate an economic recovery.

Republican House Budget Committee chairman Paul Ryan would not be drawn on whether his party would oppose the proposals.

He said: ‘We'll see the details of this budget tomorrow, but it looks like to me that it is going to be very small on spending discipline and a lot of new spending so-called investments.

‘Borrowing and spending is not the way to prosperity. Today's deficits means tomorrow's tax increases, and that costs jobs.’

The deficit is forecast to reach $1.48 trillion this fiscal year, or 9.8 per cent of GDP. This would be down from 10 per cent of GDP in 2010, but still very high for the United States on a historical basis.

The proposed cuts go further than the $400 billion in savings Obama promised in his State of the Union address, where he announced a five-year spending freeze on non-discretionary domestic spending.

Lew said ‘tough tradeoffs’ would have to be made.

He added: ‘The challenge we have is to live within our means but also invest in the future.

FACTS ABOUT THE BUDGET

What is the Budget?

It's a way for the President to unveil his plans for the next few years and how he will pay for it

What to watch for?

Social Security, Medicare and whether taxes
will go up are all big issues. The $1.1trillion cuts expected to come from two-thirds spending cuts, one-third closing tax loopholes

Then what?

The House and Senate take the proposals and draw up their own
blueprints, which are voted on and returned to the President - who can veto

Any big concerns?

The Government could hit its $14.3trillion limit on
borrowing in April, causing a default on its loans, upsetting the market.

Republican-controlled Congress could stall any vote to increase the limit until Obama agrees to greater spending cuts

‘There are scores of programmes that are being reduced, and I think it's important to note that we're beyond the easy, low-hanging fruit.’

A Democratic aide said the budget would reduce Pentagon spending by $78billion over five years. Pentagon cuts would include the C-17 aircraft, the alternate engine to the Joint Strike Fighter and the Marine Expeditionary Vehicle that the Defense Department says it does not need.

Democrats and Republicans in Congress have clashed over how far to go with spending cuts to trim the deficit.

Obama argues some spending increases are necessary to make the U.S. economy more competitive, while Republicans push for deeper cuts and oppose any tax hikes.

A key test of whether the parties can work together will be a deadline in April or May for Congress to approve allowing more federal debt or risk the United States falling into a debt default that could cause economic havoc globally.

The White House wants to keep the debate over a long-term fiscal plan separate from the bill to raise the $14.3 trillion debt ceiling, and separate from legislation to replace a stop-gap government funding measure for this year that expires on March 4.

Boehner refused to rule out the possibility of a government shutdown when that stopgap measure runs out. ‘Our goal is to reduce spending, it is not to shut down the government,’ he said.